On July 1, 2006, Rodriguez Corporation purchased factory equipment for $150,000.Salvage value was estimated to be $4,000.The equipment will be depreciated over ten years using the double-declining balance method.Counting the year of acquisition as one-half year, Gonzalez should record depreciation expense for 2007 on this equipment of

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The double-declining balance method involves depreciating the asset at twice the straight-line rate. The straight-line rate is 10% (100% / 10 years), so the double-declining rate is 20%. For 2006, depreciation is $150,000 * 20% * 0.5 = $15,000. For 2007, the book value is $150,000 - $15,000 = $135,000. Depreciation for 2007 is $135,000 * 20% = $27,000.

On July 1, 2006, Rodriguez Corporation Purchased Factory Equipment for $150,000.Salvage